Emerging Stocks Rise From Three-Week Low on American Home Prices

June 26 (Bloomberg) -- Emerging-market stocks rose from a
three-week low after residential real estate prices in the U.S.
fell less than expected, overshadowing concern about Europe’s
debt crisis and a EU summit starting June 28.

The MSCI Emerging Markets Index added 0.3 percent to 906.85
by the close in New York, snapping a three-day drop and rising
from the lowest level since June 6 yesterday. Telecommunication
companies led the advance as OAO Rostelecom, Russia’s dominant
fixed-line phone company, surged 1.9 percent to lift Russia’s
Micex Index from a three-week low. Oi SA rose in Sao Paulo while
Cia Hering tumbled.

The S&P/Case-Shiller index of property values in 20 U.S.
cities dropped 1.9 percent in April from the same month in 2011,
the smallest decline since November 2010. The median forecast
was for a 2.5 percent drop. European Union leaders will hold a
two-day summit to find a solution to the debt crisis. Brent oil
in London advanced for a third day.

“The Case-Shiller numbers are supporting the positive
market trend for today and fit in with the general picture that
the U.S. is doing better,” Daniel Lenz, the emerging markets
chief strategist at DZ Bank AG in Frankfurt, said by phone
today. “Markets like when things are a little better than
expected. There is also some hope ahead of the summit, though we
don’t expect a huge breakthrough.”

Consumer Data

The MSCI Emerging Markets Index has slumped 13 percent this
quarter on concern Europe’s debt crisis is escalating. The gauge
trades at 9.9 times estimated earnings, compared with an 11.8
multiple for the MSCI World Index of developed nations,
according to data compiled by Bloomberg.

Consumer confidence in the U.S. dropped for a fourth
straight month, to 62 from a revised 64.4 in the prior month,
figures from the Conference Board, a New York-based private
research group, showed today. The median forecast of economists
surveyed by Bloomberg News called for a reading of 63.

The Micex Index gained 1 percent in Moscow, with Rostelecom
gaining the most in a week, while the Bovespa added 0.1 percent,
paring earlier losses.

A measure of telecommunication service operators in the
MSCI Emerging Markets Index climbed 0.9 percent, the best
performer of 10 industry groups today.

“We are still in a critical period with lingering concern
over China’s economic slowdown and Europe’s debt problem,” said
Saharat Chudsuwan, chief investment officer at Bangkok-based
Tisco Asset Management Co., which manages about $4.7 billion.
“It’s a global theme for equity investors to switch to less
risky stocks such as telecommunication and health-care
companies.”

Telecommunication

China Telecom Corp., the country’s biggest fixed-line
carrier, climbed 1.5 percent in Hong Kong, advancing for the
first time in six days as some investors favored companies with
domestic revenue. SK Telecom Co., South Korea’s largest mobile-phone operator, added 1.7 percent.

South Africa’s FTSE/JSE Africa All Share Index advanced 0.1
percent, snapping three days of declines.

Absa Group Ltd., the South African bank controlled by
Barclays Plc, dropped 8.3 percent, the most since 2002, after
the lender said first-half earnings before one-time items
declined as much as 10 percent as bad loans increased.